Huazhu Group Limited Announces Preliminary Results for Hotel Operations in the Fourth Quarter and the Full Year of 2021

20/01/2022

SHANGHAI, China, Jan. 20, 2022 (GLOBE NEWSWIRE) -- Huazhu Group Limited (NASDAQ: HTHT and HKEX: 1179) (“Huazhu”, “we” or “our”), a world-leading hotel group, today announced preliminary results for hotel operations in the fourth quarter (“Q4 2021”) and the full year ended December 31, 2021.

COVID-19 update
For our Legacy-Huazhu business, RevPAR recovery in Q4 2021 was still significantly impacted by several COVID-19 resurgences in China. In terms of monthly breakdown, our RevPAR recovered to 90%, 76%, and 90% of the levels in October, November, and December 2019, respectively. Entering into 2022, we saw that the COVID-19 pandemic was still lingering in several cities and provinces, such as Xi’an, Tianjin and Henan Province, etc. Additionally, the new Omicron variant was also detected recently in several cities in China. More importantly, travelling restrictions are expected to be stricter in Beijing and its surrounding areas in anticipation of the upcoming Beijing Olympic Winter Games. Therefore, all the above factors would increase uncertainties and pressures to our RevPAR recovery in the first quarter of 2022.

After continuous business recovery in Q3 2021 thanks to the progress of vaccination campaign and easing of restrictions, Steigenberger Hotels AG and its subsidiaries (“DH”) in Q4 2021 were impacted by tightened governmental control measures and testing requirements due to the third and fourth waves of the COVID-19 pandemic in European countries. As a result, the recovery trend of DH was disrupted in November 2021, as RevPAR and occupancy numbers declined compared to those in the summer. In terms of vaccination, as of January 18, 2022, approximately 75% of the entire German population has received at least one dose and approximately 72% of the population has been fully vaccinated, and 47% has received the third dose. RevPAR recovery in the near-term is expected to remain under pressure due to the recent Omicron variant. However, we believe that the RevPAR recovery trend will quickly resume once the number of COVID cases start to decline.

Meanwhile, DH continues its effort to implement a comprehensive cash and cash flow improvement program, especially focusing on personnel cost reduction, process optimization and negotiation of further lease waivers. In addition, government subsidy was received in December 2021.

Operating Results: Legacy-Huazhu(1)

 Number of hotels  Number of rooms
 Opened
in Q4 2021

Closed (2)
in Q4 2021

Net added
in Q4 2021

As of
December 31,
2021
(3)
 As of
December 31,
2021

  
Leased and owned hotels7(8)(1)662 91,284
Manachised and franchised hotels436(74)362 7,044 636,859
Total443(82)361 7,706 728,143
(1)   Legacy-Huazhu refers to Huazhu and its subsidiaries, excluding DH.
(2)   The reasons for hotel closures mainly included non-compliance with our brand standards, operating losses, and property-related issues. In Q4 2021, we temporarily closed 9 hotels for brand upgrade and business model change purposes.
(3)   As of December 31, 2021, 147 hotels were requisitioned by governmental authorities.


 As of December 31, 2021
 Number of hotels Unopened hotels in pipeline
Economy hotels4,7721,194
Leased and owned hotels3973
Manachised and franchised hotels4,3751,191
Midscale and upscale hotels2,9341,377
Leased and owned hotels26515
Manachised and franchised hotels2,6691,362
Total7,7062,571


Operational hotels excluding hotels under requisition
 For the quarter ended 
 December 31,September 30,December 31,yoy
 2020 2021 2021 change
Average daily room rate (in RMB)   
Leased and owned hotels272 296 286 5.1%
Manachised and franchised hotels224 238 232 3.9%
Blended231 246 239 3.7%
Occupancy Rate (as a percentage)   
Leased and owned hotels79.6%69.7%67.4%-12.2p.p.
Manachised and franchised hotels80.8%72.2%68.4%-12.4p.p.
Blended80.6%71.9%68.2%-12.4p.p.
RevPAR (in RMB)    
Leased and owned hotels217 206 193 -11.0%
Manachised and franchised hotels181 172 159 -12.1%
Blended186 177 163 -12.2%


 For the quarter ended
 December 31,December 31,yoy
 2019 2021 change
Average daily room rate (in RMB)  
Leased and owned hotels277 286 3.2%
Manachised and franchised hotels223 232 4.5%
Blended232 239 3.1%
Occupancy Rate (as a percentage)  
Leased and owned hotels84.7%67.4%-17.4p.p.
Manachised and franchised hotels81.6%68.4%-13.3p.p.
Blended82.2%68.2%-13.9p.p.
RevPAR (in RMB)   
Leased and owned hotels235 193 -17.9%
Manachised and franchised hotels182 159 -12.5%
Blended191 163 -14.4%


 For the year ended
 December 31,December 31,yoy
 2020 2021 change
Average daily room rate (in RMB)  
Leased and owned hotels241 286 18.7%
Manachised and franchised hotels204 232 13.3%
Blended210 239 13.8%
Occupancy Rate (as a percentage)  
Leased and owned hotels68.9%70.6%+1.7 p.p.
Manachised and franchised hotels71.4%72.4%+1.0 p.p.
Blended71.0%72.2%+1.2 p.p.
RevPAR (in RMB)   
Leased and owned hotels166 202 21.7%
Manachised and franchised hotels146 168 14.9%
Blended149 172 15.6%


 For the year ended
 December 31,December 31,yoy
 2019 2021 change
Average daily room rate (in RMB)  
Leased and owned hotels276 286 3.5%
Manachised and franchised hotels224 232 3.2%
Blended234 239 2.0%
Occupancy Rate (as a percentage)  
Leased and owned hotels87.0%70.6%-16.3p.p.
Manachised and franchised hotels83.8%72.4%-11.4p.p.
Blended84.4%72.2%-12.2p.p.
RevPAR (in RMB)   
Leased and owned hotels240 202 -15.9%
Manachised and franchised hotels188 168 -10.8%
Blended198 172 -12.7%


Same-hotel operational data by class        
Mature hotels in operation for more than 18 months (excluding hotels under requisition)
 Number of hotelsSame-hotel RevPARSame-hotel ADRSame-hotel Occupancy
 As of
December 31,

For the quarter yoyFor the quarter yoyFor the quarter yoy
 ended
December 31,
changeended
December 31,
changeended
December 31,
change
 2020202120202021 20202021 2020 2021 (p.p.)
Economy hotels3,3413,341152128-15.6%1791800.8%85.2%71.4%-13.8
Leased and owned hotels388388170146-14.1%2012041.1%84.6%71.9%-12.7
Manachised and franchised hotels2,9532,953149125-15.9%1741750.6%85.3%71.3%-14.0
Midscale and upscale hotels1,7341,734247208-15.7%314312-0.5%78.7%66.7%-12.0
Leased and owned hotels222222280238-15.1%3783780.2%74.2%62.8%-11.4
Manachised and franchised hotels1,5121,512240202-15.9%301299-0.8%79.7%67.6%-12.1
Total5,0755,075192162-15.6%2322330.3%82.5%69.4%-13.1


 
 Number of hotelsSame-hotel RevPARSame-hotel ADRSame-hotel Occupancy
 As of
December 31,

For the quarter yoyFor the quarter yoyFor the quarter yoy
 ended
December 31,
changeended
December 31,
changeended
December 31,
change
 2019202120192021 20192021 2019 2021 (p.p.)
Economy hotels2,4422,442163130-20.1%186181-2.8%87.9%72.2%-15.7
Leased and owned hotels380380185145-21.8%211202-4.4%87.7%71.7%-16.0
Manachised and franchised hotels2,0622,062158127-19.7%179175-2.4%87.9%72.3%-15.6
Midscale and upscale hotels1,1601,160269206-23.5%325313-3.7%82.9%65.9%-17.0
Leased and owned hotels187187329229-30.6%394369-6.5%83.5%62.0%-21.5
Manachised and franchised hotels973973253200-21.0%305298-2.4%82.7%66.9%-15.8
Total3,6023,602204160-21.7%237229-3.5%86.0%69.7%-16.2


Same-hotel operational data by class        
Mature hotels in operation for more than 18 months (excluding hotels under requisition)
 Number of hotelsSame-hotel RevPARSame-hotel ADRSame-hotel Occupancy
 As of
December 31,

For the year yoyFor the year yoyFor the year yoy
 ended
December 31,
changeended
December 31,
changeended
December 31,
change
 2020202120202021 20202021 2020 2021 (p.p.)
Economy hotels3,3413,34112513810.8%16418210.8%75.8%75.8%+0.0
Leased and owned hotels38838813115317.3%17920615.0%73.0%74.5%+1.5
Manachised and franchised hotels2,9532,9531231359.3%1611779.7%76.4%76.1%-0.3
Midscale and upscale hotels1,7341,7342022219.3%2893158.8%69.8%70.1%+0.3
Leased and owned hotels22222221925014.2%33837811.7%64.8%66.2%+1.4
Manachised and franchised hotels1,5121,5121982148.1%2793018.0%70.9%71.0%+0.1
Total5,0755,07515617210.2%21323410.0%73.3%73.5%+0.1


 
 Number of hotelsSame-hotel RevPARSame-hotel ADRSame-hotel Occupancy
 As of
December 31,

For the year yoyFor the year yoyFor the year yoy
 ended
December 31,
changeended
December 31,
changeended
December 31,
change
 2019202120192021 20192021 2019 2021 (p.p.)
Economy hotels2,4422,442172138-19.8%190182-4.7%90.2%75.9%-14.3
Leased and owned hotels380380193151-21.6%213203-4.4%90.7%74.4%-16.3
Manachised and franchised hotels2,0622,062166134-19.3%185176-4.7%90.1%76.3%-13.7
Midscale and upscale hotels1,1601,160275218-20.8%331315-4.8%83.0%69.0%-14.0
Leased and owned hotels187187335244-26.9%398371-6.8%84.1%65.9%-18.2
Manachised and franchised hotels973973256209-18.4%310299-3.6%82.7%70.0%-12.7
Total3,6023,602209167-20.1%238227-4.7%87.6%73.4%-14.2

Operating Results: Legacy-DH(4)

 Number of hotels Number of
rooms
 Unopened hotels in pipeline
 Opened
in Q4 2021

Closed
in Q4 2021

Net added
in Q4 2021

As of
December 31, 2021(5)

 

 

As of
December
31,2021


 

 

As of
December
31,2021


 
Leased hotels1- 176 14,264 28
Manachised and franchised hotels3(1)248 10,809 9
Total4(1)3124 25,073 37
(4)    Legacy-DH refers to DH.
(5)   As of December 31, 2021, a total of 4 hotels were temporarily closed. 1 hotel was closed for renovation and 1 hotel was closed due to flood damage. Additionally, 1 hotel was in winter break and 1 hotel was temporarily closed due to low demand.


 For the quarter ended 
 December 31,September 30,December 31,yoy
 2020 2021 2021 change
Average daily room rate (in EUR)    
Leased hotels78 94 95 21.6%
Manachised and franchised hotels73 104 93 26.6%
Blended76 99 94 23.5%
Occupancy rate (as a percentage)    
Leased hotels20.9%48.0%42.8%+22.0 p.p.
Managed and franchised hotels25.4%49.4%50.7%+25.3 p.p.
Blended22.5%48.6%46.1%+23.6 p.p.
RevPAR (in EUR)    
Leased hotels16 45 41 149.6%
Managed and franchised hotels19 52 47 152.7%
Blended17 48 43 152.6%


 For the year ended
 December 31,December 31,yoy
 2020 2021 change
Average daily room rate (in EUR)  
Leased and owned hotels89 91 2.2%
Manachised and franchised hotels85 89 4.8%
Blended88 90 3.0%
Occupancy rate (as a percentage)  
Leased and owned hotels33.9%31.6%-2.3 p.p.
Manachised and franchised hotels36.3%40.5%+4.2 p.p.
Blended34.8%35.2%+0.3 p.p.
RevPAR (in EUR)   
Leased and owned hotels30 29 -4.6%
Manachised and franchised hotels31 36 16.8%
Blended31 32 4.0%

Hotel Portfolio by Brand

 As of December 31, 2021
 HotelsRoomsUnopened hotels
 in operationin pipeline
Economy hotels4,786387,8951,206
HanTing Hotel3,027274,118696
Hi Inn44324,674117
Elan Hotel(6)1,08364,606353
Ibis Hotel21922,83428
Zleep Hotels141,66312
Midscale hotels2,450271,4211,072
Ibis Styles Hotel798,40421
Starway Hotel52844,016252
JI Hotel1,381166,836575
Orange Hotel43247,393217
CitiGO Hotel304,7727
Upper midscale hotels45467,068264
Crystal Orange Hotel14419,19058
Manxin Hotel848,27362
Madison Hotel375,49056
Mercure Hotel12521,21750
Novotel Hotel154,03213
IntercityHotel(7)498,86625
Upscale hotels12523,05661
Jaz in the City35871
Joya Hotel91,7600
Blossom House341,65839
Grand Mercure Hotel71,4853
Steigenberger Hotels & Resorts(8)6516,38912
MAXX (9)71,1776
Others153,7765
Other hotels(10)153,7765
Total7,830753,2162,608

(6)   As of December 31, 2021, 70 Ni Hao Hotels were included in the operational hotel for Elan Hotels and 163 Ni Hao Hotels were included in the pipeline for Elan Hotels.
(7)   As of December 31, 2021, 2 operational hotels and 8 pipeline hotels of IntercityHotel were in China.
(8)   As of December 31, 2021, 14 operational hotels and 6 pipeline hotels of Steigenberger Hotels & Resorts were in China.
(9)   As of December 31, 2021, 2 operational hotels and 5 pipeline hotels of MAXX were in China.
(10)   Other hotels include other partner hotels and other hotel brands in Yongle Huazhu Hotel & Resort Group (excluding Steigenberger Hotels & Resorts and Blossom House).

About Huazhu Group Limited
Originated in China, Huazhu Group Limited is a world-leading hotel group. As of December 31, 2021, Huazhu operated 7,830 hotels with 753,216 rooms in operation in 17 countries. Huazhu’s brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, Ni Hao Hotel and CitiGO Hotel. Upon the completion of the acquisition of DH on January 2, 2020, Huazhu added five brands to its portfolio, including Steigenberger Hotels & Resorts, MAXX by Steigenberger, Jaz in the City, IntercityHotel and Zleep Hotels. In addition, Huazhu also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in the pan-China region.

Huazhu’s business includes leased and owned, manachised and franchised models. Under the lease and ownership model, Huazhu directly operates hotels typically located on leased or owned properties. Under the manachise model, Huazhu manages manachised hotels through the on-site hotel managers that Huazhu appoints, and Huazhu collects fees from franchisees. Under the franchise model, Huazhu provides training, reservations and support services to the franchised hotels, and collects fees from franchisees but does not appoint on-site hotel managers. Huazhu applies a consistent standard and platform across all of its hotels. As of December 31, 2021, Huazhu operates 14 percent of its hotel rooms under lease and ownership model, and 86 percent under manachise and franchise models.

For more information, please visit Huazhu’s website: http://ir.huazhu.com.

Safe Harbor Statement Under the U.S. Private Securities Litigation Reform Act of 1995: The information in this release contains forward-looking statements which involve risks and uncertainties. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; economic conditions; the regulatory environment; our ability to attract and retain customers and leverage our brands; trends and competition in the lodging industry; the expected growth of demand for lodging; and other factors and risks detailed in our filings with the U.S. Securities and Exchange Commission. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements, which may be identified by terminology such as “may,” “should,” “will,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “forecast,” “project” or “continue,” the negative of such terms or other comparable terminology. Readers should not rely on forward-looking statements as predictions of future events or results.

Huazhu undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

Contact Information
Huazhu Investor Relations
Tel: 86 (21) 6195 9561
Email: ir@huazhu.com
http://ir.huazhu.com


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